EXHIBIT 4.2
ASSOCIATED MATERIALS INCORPORATED
as Issuer
INDENTURE
Dated as of April 23, 2002
WILMINGTON TRUST COMPANY
Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)..................................................... 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(b)..................................................... 7.03, 7.08, 7.10
(b)(1).................................................. 7.10
(c)..................................................... N.A.
311........................................................ 7.03
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.05
(b)..................................................... 13.03
(c)..................................................... 13.03
313(a)..................................................... 7.06
(b)(1).................................................. N.A.
(b)..................................................... 7.06
(c)..................................................... N.A.
(d)..................................................... N.A.
314(a)..................................................... 4.02
314(a)(4).................................................. 4.11
(b)..................................................... N.A.
(c)(1).................................................. N.A.
(c)(2).................................................. N.A.
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... N.A.
(f)..................................................... N.A.
315(a)..................................................... 7.01
(b)..................................................... N.A.
(c)..................................................... N.A.
(d)..................................................... N.A.
(e)..................................................... N.A.
316(a)(last sentence)...................................... N.A.
(a)(1)(A)............................................... N.A.
(a)(1)(B)............................................... N.A.
(a)(2).................................................. N.A.
(b)..................................................... N.A.
317(a)(1).................................................. N.A.
(a)(2).................................................. N.A.
(b)..................................................... N.A.
318(a)..................................................... N.A.
TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions............................................. 1
SECTION 1.02. Other Definitions....................................... 30
SECTION 1.03. Incorporation by Reference of Trust Indenture Act....... 31
SECTION 1.04. Rules of Construction................................... 31
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating......................................... 32
SECTION 2.02. Execution and Authentication............................ 33
SECTION 2.03. Registrar and Paying Agent.............................. 33
SECTION 2.04. Paying Agent To Hold Money in Trust..................... 34
SECTION 2.05. Securityholder Lists.................................... 34
SECTION 2.06. Transfer and Exchange................................... 34
SECTION 2.07. Replacement Securities.................................. 35
SECTION 2.08. Outstanding Securities.................................. 35
SECTION 2.09. Temporary Securities.................................... 36
SECTION 2.10. Cancellation............................................ 36
SECTION 2.11. Defaulted Interest...................................... 36
SECTION 2.12. CUSIP Numbers........................................... 37
SECTION 2.13. Issuance of Additional Securities....................... 37
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee...................................... 38
SECTION 3.02. Selection of Securities To Be Redeemed.................. 38
SECTION 3.03. Notice of Redemption.................................... 38
SECTION 3.04. Effect of Notice of Redemption.......................... 39
SECTION 3.05. Deposit of Redemption Price............................. 39
SECTION 3.06. Securities Redeemed in Part............................. 40
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities................................... 40
SECTION 4.02. SEC Reports............................................. 40
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SECTION 4.03. Limitation on Indebtedness.............................. 41
SECTION 4.04. Limitation on Restricted Payments....................... 45
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries............................... 49
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock...... 50
SECTION 4.07. Limitation on Affiliate Transactions.................... 53
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries............................... 55
SECTION 4.09. Change of Control....................................... 56
SECTION 4.10. Future Guarantors....................................... 58
SECTION 4.11. Compliance Certificate.................................. 58
SECTION 4.12. Further Instruments and Acts............................ 58
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets............... 58
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default....................................... 60
SECTION 6.02. Acceleration............................................ 63
SECTION 6.03. Other Remedies.......................................... 63
SECTION 6.04. Waiver of Past Defaults................................. 63
SECTION 6.05. Control by Majority..................................... 64
SECTION 6.06. Limitation on Suits..................................... 64
SECTION 6.07. Rights of Holders To Receive Payment.................... 65
SECTION 6.08. Collection Suit by Trustee.............................. 65
SECTION 6.09. Trustee May File Proofs of Claim........................ 65
SECTION 6.10. Priorities.............................................. 66
SECTION 6.11. Undertaking for Costs................................... 66
SECTION 6.12. Waiver of Stay or Extension Laws........................ 66
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee....................................... 67
SECTION 7.02. Rights of Trustee....................................... 68
SECTION 7.03. Individual Rights of Trustee............................ 70
SECTION 7.04. Trustee's Disclaimer.................................... 70
SECTION 7.05. Notice of Defaults...................................... 70
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SECTION 7.06. Reports by Trustee to Holders........................... 70
SECTION 7.07. Compensation and Indemnity.............................. 71
SECTION 7.08. Replacement of Trustee.................................. 72
SECTION 7.09. Successor Trustee by Merger............................. 73
SECTION 7.10. Eligibility; Disqualification........................... 73
SECTION 7.11. Preferential Collection of Claims Against Company....... 73
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance........ 74
SECTION 8.02. Conditions to Defeasance................................ 75
SECTION 8.03. Application of Trust Money.............................. 77
SECTION 8.04. Repayment to Company.................................... 77
SECTION 8.05. Indemnity for Government Obligations.................... 77
SECTION 8.06. Reinstatement........................................... 77
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders.............................. 78
SECTION 9.02. With Consent of Holders................................. 79
SECTION 9.03. Compliance with Trust Indenture Act..................... 80
SECTION 9.04. Revocation and Effect of Consents and Waivers........... 80
SECTION 9.05. Notation on or Exchange of Securities................... 81
SECTION 9.06. Trustee To Sign Amendments.............................. 81
SECTION 9.07. Payment for Consent..................................... 81
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate................................ 81
SECTION 10.02. Liquidation, Dissolution, Bankruptcy.................... 82
SECTION 10.03. Default on Senior Indebtedness of the Company........... 82
SECTION 10.04. Acceleration of Payment of Securities................... 84
SECTION 10.05. When Distribution Must Be Paid Over..................... 84
SECTION 10.06. Subrogation............................................. 84
SECTION 10.07. Relative Rights......................................... 85
SECTION 10.08. Subordination May Not Be Impaired by Company............ 85
SECTION 10.09. Rights of Trustee and Paying Agent...................... 85
SECTION 10.10. Distribution or Notice to Representative................ 86
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SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate................................... 86
SECTION 10.12. Trust Moneys Not Subordinated........................... 86
SECTION 10.13. Trustee Entitled To Rely................................ 86
SECTION 10.14. Trustee To Effectuate Subordination..................... 87
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness
of the Company........................................ 87
SECTION 10.16. Reliance by Holders of Senior Indebtedness of the
Company on Subordination Provisions................... 87
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties.............................................. 87
SECTION 11.02. Limitation on Liability................................. 90
SECTION 11.03. Successors and Assigns.................................. 90
SECTION 11.04. No Waiver............................................... 90
SECTION 11.05. Modification............................................ 91
SECTION 11.06. Release of Subsidiary Guarantor......................... 91
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement To Subordinate................................ 91
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.................... 92
SECTION 12.03. Default on Senior Indebtedness of Subsidiary Guarantor.. 92
SECTION 12.04. Demand for Payment...................................... 94
SECTION 12.05. When Distribution Must Be Paid Over..................... 94
SECTION 12.06. Subrogation............................................. 94
SECTION 12.07. Relative Rights......................................... 94
SECTION 12.08. Subordination May Not Be Impaired by Company............ 95
SECTION 12.09. Rights of Trustee and Paying Agent...................... 95
SECTION 12.10. Distribution or Notice to Representative................ 95
SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit
Right To Demand Payment............................... 96
SECTION 12.12. Trustee Entitled To Rely................................ 96
SECTION 12.13. Trustee To Effectuate Subordination..................... 96
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness
of Subsidiary Guarantor............................... 97
SECTION 12.15. Reliance by Holders of Senior Indebtedness of Subsidiary
Guarantors on Subordination Provisions................ 97
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ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls............................ 97
SECTION 13.02. Notices................................................. 97
SECTION 13.03. Communication by Holders with Other Holders............. 98
SECTION 13.04. Certificate and Opinion as to Conditions Precedent...... 99
SECTION 13.05. Statements Required in Certificate or Opinion........... 99
SECTION 13.06. When Securities Disregarded............................. 99
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar............ 100
SECTION 13.08. Legal Holidays.......................................... 100
SECTION 13.09. Governing Law........................................... 100
SECTION 13.10. No Recourse Against Others.............................. 100
SECTION 13.11. Successors.............................................. 100
SECTION 13.12. Multiple Originals...................................... 101
SECTION 13.13. Table of Contents; Headings............................. 101
SECTION 13.14. No Adverse Interpretation of Other Agreements........... 101
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
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INDENTURE dated as of April 23, 2002, among ASSOCIATED MATERIALS
INCORPORATED, a Delaware corporation (the "Company"), the Subsidiary Guarantor
and WILMINGTON TRUST COMPANY, a Delaware corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities, Private Exchange Securities and Additional
Securities (collectively, the "Securities").
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means:
(1) any property, plant, equipment or other assets used or usable
in a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
or (3) above is primarily engaged in a Related Business.
"Additional Securities" means, subject to the Company's compliance
with Section 4.03, 9 3/4% Senior Subordinated Securities Due 2012 issued from
time to time after the Issue Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than
Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of
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such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. For purposes of
Sections 4.04 and 4.07 only, "Affiliate" shall also mean any beneficial owner of
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease (other than operating
leases entered into in the ordinary course of business), transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary,
other than, in the case of clauses (1), (2) and (3) above,
(A) a disposition or transfer by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Restricted
Subsidiary;
(B) for purposes of Section 4.06 only, (x) a disposition that
constitutes a Restricted Payment permitted by Section 4.04 or a Permitted
Investment or (y) a disposition of all or substantially all the assets of
the Company in accordance with Section 5.01;
(C) sales or other dispositions of obsolete, uneconomical,
negligible, damaged, worn-out or surplus assets in the
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ordinary course of business (including but not limited to equipment,
inventory and intellectual property);
(D) a disposition of assets with a fair market value of less than
or equal to $1.0 million, not to exceed $5.0 million in the aggregate in
any 12 month period;
(E) sale or discount of accounts receivable in connection with the
compromise or collection thereof;
(F) sale or exchange of equipment in connection with the purchase
or other acquisition of equipment; and
(G) sales or grants of licenses to use intellectual property;
provided, however, that a disposition of all or substantially all the assets of
the Company and its Restricted Subsidiaries taken as a whole will be governed by
the provisions of this Indenture described under Section 4.09 and/or the
provisions described under Section 5.01 and not by the provisions described
under Section 4.06.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of "Capital Lease Obligation".
"Average Life" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing
(1) the sum of the products of the numbers of years from the date
of determination to the dates of each successive scheduled principal
payment of or redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such payment by
(2) the sum of all such payments.
"Bank Facilities" means the bank facilities under the Credit
Agreement.
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"Bank Indebtedness" means all Obligations pursuant to the Credit
Agreement.
"Board of Directors" with respect to a Person means the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
(1) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than (directly or indirectly) one or more
Permitted Holders, is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), except that such person shall be
deemed to have "beneficial ownership" of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time, and except that any Person that is deemed
to have beneficial ownership of shares solely as the result of being part
of a group pursuant to Rules 13d-5(b)(1) of the Exchange Act shall be
deemed not to have beneficial ownership of any shares held by a Permitted
Holder forming a part of such group), directly or indirectly, of more than
35% of the total voting power of the Voting Stock of the Company;
provided, however, that the Permitted Holders beneficially own (as defined
in Rule 13d-3 and 13d-5 under the Exchange Act), directly or indirectly,
in the aggregate a lesser percentage of the total voting power of the
Voting Stock of the
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Company than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company (for the purposes of
this clause (1), such other person shall be deemed to beneficially own any
Voting Stock of a specified person held by a parent entity, if such other
person is the beneficial owner (as defined in this provision), directly or
indirectly, of more than 35% of the voting power of the Voting Stock of
such parent entity and the Permitted Holders beneficially own (as defined
in this provision), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent entity
and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of such parent entity);
(2) individuals who after the first board meeting after the
consummation of the Merger constituted the Board of Directors of the
Company or Parent (together with any new directors whose election by such
Board of Directors of the Company of the Parent Board or whose nomination
for election by the shareholders of the Company or the Parent, as the case
may be, was approved by a vote of a majority of the directors of the
Company or the Parent, as the case may be, then still in office who were
either directors after the first board meeting after the consummation of
the Merger or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company or the Parent then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the Company,
or the sale of all or substantially all the assets of the Company to
another Person (other than a Person that is controlled by the Permitted
Holders), and, in the case of any such merger or consolidation, the
securities of the Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction,
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at least a majority of the aggregate voting power of the Voting Stock of
the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Company Order" means a written order from the Company to the
Trustee requesting the Trustee to authenticate the Securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which internal financial statements
are available on or prior to the date of such determination to (y) Consolidated
Interest Expense for such four fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness
as if such Indebtedness had been Incurred on the first day of such period
(and, if such Indebtedness is revolving Indebtedness, the amount of
Indebtedness deemed to be outstanding for such period shall be the average
outstanding amount of such Indebtedness during such period);
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary had not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used
to
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repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
attributable to the assets which are the subject of such Asset Disposition
for such period, or increased by an amount equal to EBITDA (if negative),
attributable thereto for such period and Consolidated Interest Expense for
such period shall be reduced by an amount equal to the Consolidated
Interest Expense attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or
(4) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such
period.
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For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets (including Capital Stock), the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in accordance with Regulation S-X under the
Exchange Act or as otherwise acceptable to the SEC. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest on
such Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, without
duplication,
(1) interest expense attributable to Capital Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) net payments or receipts pursuant to Hedging Obligations;
(7) dividends declared and paid in cash or Disqualified Stock in
respect of (A) all Preferred Stock of Restricted Subsidiaries and (B) all
Disqualified Stock of the Company, in each case held by Persons other than
the Company or a Wholly Owned Subsidiary in each case other than dividends
payable in Qualified Stock;
(8) interest incurred in connection with Investments in
discontinued operations;
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(9) interest accruing on any Indebtedness of any other Person
(other than a Subsidiary) to the extent such Indebtedness is Guaranteed by
(or secured by the assets of) the Company or any Restricted Subsidiary and
such Indebtedness is accelerated or any payment is actually made in
respect of such Guarantee; and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company or a
Restricted Subsidiary thereof) in connection with Indebtedness Incurred by
such plan or trust,
and less, to the extent included in such interest expense, the amortization
during such period of capitalized financing costs; provided, however, that the
aggregate amount of amortization relating to any such capitalized financing
costs deducted in calculating Consolidated Interest Expense shall not exceed
5.0% of the aggregate amount of the financing giving rise to such capitalized
financing costs.
"Consolidated Net Income" means, for any period, the sum of (1) net
income of the Company and its Subsidiaries and (2) to the extent deducted in
calculating net income of the Company and its Subsidiaries, any non-recurring
fees, expenses or charges related to the Transactions; provided, however, that
there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (3) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations
contained in clause (2) below); and
(B) the Company's equity in a net loss of any such Person
for such period shall be included in determining such Consolidated
Net Income;
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(2) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(A) subject to the exclusion contained in clause (3) below,
the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution paid to another Restricted Subsidiary, to the
limitation contained in this clause); and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(3) any gain or loss (and the related tax effects) realized upon
the sale or other disposition of any assets of the Company, its
consolidated Restricted Subsidiaries or any other Person (including
pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Capital Stock of
any Person;
(4) extraordinary, non-cash or non-recurring gains, losses or
charges, including (i) those related to impairment of goodwill and other
intangible assets and (ii) the write-off of deferred financing costs and
related premiums paid in connection with any early extinguishment of
Indebtedness and the related tax effects;
(5) the cumulative effect of a change in accounting principles;
and
(6) any net income or loss attributable to discontinued operations.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repay-
-11-
ments, redemptions, proceeds or returns increase the amount of Restricted
Payments permitted under Section 4.04(a)(3)(D).
"Credit Agreement" means the Credit Agreement dated as of April 19,
2002, by and among the Company, the lenders referred to therein, UBS AG,
Stamford Branch, as Administrative Agent, Credit Suisse First Boston, as
Syndication Agent, CIBC World Markets Corp., as Documentation Agent, together
with the related documents thereto (including any guarantees and security
documents, whether in effect on the Issue Date or entered into thereafter), as
amended, extended, renewed, restated, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and
related document) governing Indebtedness incurred to Refinance, in whole or in
part, the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit Agreement, whether
by the same or any other lender or group of lenders.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Indebtedness", with respect to a Person, means
(1) the Bank Indebtedness; and
(2) any other Senior Indebtedness of such Person which, at the
date of determination, has an aggregate principal amount outstanding of,
or under which, at the date of determination, the holders thereof are
committed to lend up to, at least $25.0 million and is specifically
designated by such Person in the instrument evidencing or governing such
Senior Indebtedness as "Designated Senior Indebtedness" for purposes of
this Indenture.
"Disqualified Stock" means, with respect to any Person, that portion
of any Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder) or upon the happening of any event:
-12-
(1) matures (excluding any maturity as a result of an optional
redemption by the issuer thereof) or is mandatorily redeemable (other than
redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the date that is 91 days after the Stated Maturity
of the Securities; provided, however, that if such Capital Stock is issued to
any employee or to any plan for the benefit of employees of the Company or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy obligations as a result of such
employee's death or disability; and provided, further, however, that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to purchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the date that is 91 days after the Stated Maturity of the
Securities shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms applicable to the
Securities in Section 4.06 and 4.09 of this Indenture.
The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price shall be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed,
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price shall be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income:
-13-
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation and amortization expense of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in
a prior period); and
(4) all other non-cash charges of the Company and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent
that it represents an accrual of or reserve for cash expenditures in any
future period);
in each case for such period determined in accordance with GAAP. Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and non-cash charges of, a Restricted
Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to
the extent (and in the same proportion, including by reason of minority
interest) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Equity Financing" means the financing by Parent of at least $172.0
million of equity capital to provide a portion of the funds for the Equity
Tender Offer and the Merger.
"Equity Offering" means a primary offering of common stock or common
equity of Parent or the Company.
"Equity Tender Offer" means the cash tender offer for 100% of the
shares of common stock of the Company at a price of $50.00 per share.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Securities" means the debt securities of the Company
issued pursuant to this Indenture in exchange for, and in an
-14-
aggregate principal amount equal to, the Securities, in compliance with the
terms of the Registration Rights Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion
of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether arising
by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of busi-
-15-
ness. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty" means each Subsidiary Guaranty, as applicable.
"Guaranty Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees
the Company's obligations with respect to the Securities on the terms provided
for in this Indenture.
"Harvest Management Services Agreement" means the management
agreement, dated as of April 19, 2002 between Harvest Partners, Inc. and the
Company entered into in connection with the Transaction.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement or similar
Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Restricted Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person
for borrowed money and (B) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into
by such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person
-16-
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock of
such Person or, with respect to any Preferred Stock of any Subsidiary of
such Person, the principal amount of such Preferred Stock to be determined
in accordance with this Indenture (but excluding, in each case, any
accrued dividends);
(6) all obligations of the type referred to in clauses (1) through
(5) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through
(6) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided,
however, that in the case of Indebtedness sold at a discount, the amount of such
Indebtedness at any time will be the accreted value thereof at such time.
"Indenture" means this Indenture as amended or supplemented from
time to time.
-17-
"Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
such firm is not an Affiliate of the Company.
"Interest Rate Agreement" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements to protect such Person against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise provided for
herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary," the
definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors of the
Company.
"Issue Date" means the date on which the Securities are originally
issued.
-18-
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lenders" means the lenders from time to time party to the Credit
Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Merger" means the merger of Simon Acquisition Corp. with and into
Associated Materials Incorporated pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated as
of March 16, 2002 by and among Simon Acquisition Corp., Parent and the Company.
"Merger Date" means the day the Merger was consummated.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, title and recording tax expenses, underwriting
discounts, commissions and other fees and expenses incurred (including,
without limitation, fees and expenses of counsel, accountants and
investment bankers), and all Federal, state, provincial, foreign and local
taxes required to be accrued as a liability under GAAP, as a consequence
of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
-19-
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition; and
(4) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, against any current or contingent
liabilities associated with the property or other assets disposed in such
Asset Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Tender Offer" means the tender offer by the Company of all its
existing 9 1/4% senior subordinated securities due 2008, including the change of
control offer required pursuant to the indenture governing the existing 9 1/4%
senior subordinated securities and the defeasance of any remaining existing 9
1/4% senior subordinated securities after such change of control offer.
"Obligations" means with respect to any Indebtedness all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements and other amounts payable pursuant to the documentation governing
such Indebtedness.
"Offerings" means the issue and sale of the Securities pursuant to
the Purchase Agreement.
"Offering Circular" means an offering circular, dated as of April
18, 2002, relating to the Securities offered by the Company.
"Officer" means the Chairman of the Board, the President, Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers
one of whom shall be the principal financial officer.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
-20-
"Parent" means Associated Materials Holdings, Inc., a Delaware
corporation, and its successors.
"Parent Board" means the Board of Directors of the Parent or any
committee thereof duly authorized to act on behalf of such Board.
"Permitted Holders" means Harvest Partners, Inc. and its affiliates
and funds managed by Harvest Partners, Inc. and/or its affiliates.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary
is a Related Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is a
Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, moving, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course
of business;
(6) loans or advances to employees, directors or consultants made
in the ordinary course of business in an aggregate amount not to exceed
$2.0 million at any time outstanding;
(7) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and
-21-
owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments;
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the Company
or any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any
secured Investment or other transfer of title with respect to any secured
Investment in default;
(10) Hedging Obligations of the Company's or any Restricted
Subsidiary's business and not for the purpose of speculation;
(11) Investments existing on the Issue Date and any such Investment
that replaces or refinances such Investment in such Person existing on the
Issue Date in an amount not exceeding the amount of the Investment being
replaced or refinanced; provided, however, the new Investment is on terms
and conditions no less favorable than the Investment being renewed or
replaced;
(12) Guarantees of Indebtedness otherwise permitted under this
Indenture;
(13) Investments the payment of which consists of Qualified Stock
of Parent or the Company;
(14) Investments in the Securities;
(15) Investments consisting of obligations of one or more
consultants, officers, directors or other employees of the Company or any
of its Subsidiaries in connection with such consultants, officers',
directors' or employees' acquisition of shares of capital stock of Parent
or the Company so long as no cash is paid by the Company or any of its
Subsidiaries to such consultants, officers, directors or employees in
connection with the acquisition of any such obligations; and
-22-
(16) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (16) that are at
the time outstanding, not to exceed $2.5 million.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Purchase Agreement" means a purchase agreement dated April 18, 2002
between Simon Acquisition Corp. and the Initial Purchasers (as defined therein)
to effectuate the Offering.
"Qualified Stock" means any Capital Stock that is not Disqualified
Stock.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary incurred pursuant to
Section 4.03(a) or Section 4.03(b)(3), (4), (5), (7), (8) or (10); provided,
however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is
-23-
equal to or greater than the Average Life of the Indebtedness being
Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium
and defeasance costs) under the Indebtedness being Refinanced;
provided, further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement among the Company, the Subsidiary Guarantor, and Credit Suisse First
Boston Corporation, UBS Warburg LLC and CIBC World Markets Corp. entered into in
connection with the issuance of the Securities.
"Related Business" means any business in which the Company or any of
its Restricted was engaged on the Issue Date and any business reasonably
related, ancillary or complementary to any business of the Company or any of its
Restricted Subsidiaries in which the Company or any of its Restricted
Subsidiaries was engaged on the Issue Date or a reasonable expansion thereof.
"Representative" means with respect to a Person any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its
Capital Stock (other than dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary);
(2) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company held by
-24-
any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including
the exercise of any option to exchange any Capital Stock (other than into
Capital Stock of the Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of such Person (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such purchase,
repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor for borrowed money that is secured by a Lien on assets of
the Company or a Subsidiary Guarantor.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Senior Indebtedness" means with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue
Date or thereafter Incurred, including, and together with, all Obligations
under the Credit Agreement; and
(2) accrued and unpaid interest (including interest accruing on or
after the filing of, or which would have accrued but for the filing of,
any petition in bankruptcy or for reor-
-25-
ganization relating to such Person whether or not post-filing interest is
allowed in such proceeding) in respect of (A) indebtedness of such Person
for borrowed money, including, and together with, all Obligations under
the Credit Agreement, (B) Hedging Obligations and (C) indebtedness
evidenced by Securities, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
expressly provided that such obligations are subordinate or pari passu in right
of payment to the Securities or the Guaranty of such Person, as the case may be;
provided, however, that Senior Indebtedness shall not include
(1) any obligation of such Person to any Subsidiary;
(2) any liability for Federal, state, local or other taxes owed or
owing by such Person;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business including guarantees thereof or
instruments evidencing such liabilities);
(4) any Indebtedness of such Person (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect
to any other Indebtedness or other obligation of such Person; or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture, except to the
extent that the Indebtedness so incurred was extended by the lenders
thereof in reliance on a certificate executed and delivered by the
president, chief executive officer or chief financial or accounting
officer of the Company in which certificate such officer certified that
the incurrence of such Indebtedness was permitted under the proviso in
paragraph (a) or clause (1) or (13) in paragraph (b) of Section 4.03.
"Senior Subordinated Indebtedness" means, with respect to a Person,
the Securities (in the case of the Company), the Guaranty (in the case of a
Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari passu with the
Securities or such Guaranty, as the case may be, in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of such Person which is not Senior Indebtedness of such Person.
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"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Simon Acquisition Corp." means Simon Acquisition Corp., a Delaware
corporation.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Guaranty of such Person, as the case may be, pursuant to a written
agreement to that effect.
"Subordinated Securities Obligations" means all Obligations with
respect to the Securities, including, without limitation, principal, premium (if
any), interest payable pursuant to the terms of the Securities (including upon
the acceleration or redemption thereof), together with and including any amounts
received or receivable upon the exercise of rights of rescission or other rights
of action (including claims for damages) or otherwise.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means AMI Management Company and each
domestic Subsidiary of the Company that executes this Indenture as a guarantor
on the Issue Date and each other domestic Subsidiary of the Company that
thereafter guarantees the Securities pursuant to the terms of this Indenture.
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"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 365 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any State thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50.0 million (or the foreign currency equivalent thereof) and
has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(3) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (1) above
entered into with a bank meeting the qualifications described in clause
(2) above;
(4) investments in commercial paper, maturing not more than 365
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-l" (or higher) according to Moody's Investors
Service, Inc. or "A-l" (or higher) according to Standard & Poor's Ratings
Group;
(5) investments in securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by Moody's Investors Service,
Inc.; and
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(6) money market funds at least 95% of the assets of which
constitute Temporary Cash Investments of the kind described in clauses (1)
through (5) of this definition.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 9.03.
"Transactions" means, collectively, the Merger, the Equity Tender
Offer, the Note Tender Offer, the Equity Financing, the Bank Facilities and the
Offering.
"Trust Officer" means any officer of the Trustee having direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of their knowledge of and familiarity with the
particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of an Unrestricted Subsidiary; and
(2) any Subsidiary of the Company which is designated after the
Issue Date as an Unrestricted Subsidiary by a board resolution of the
Board of Directors of the Company; provided that a Subsidiary may be so
designated as an Unrestricted Subsidiary only if:
(A) such designation is in compliance with Section 4.04;
(B) immediately after giving effect to such designation, the
Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.03;
(C) no Default or Event of Default has occurred and is
continuing or results therefrom; and
(D) neither the Company nor any Restricted Subsidiary will
at any time
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(i) provide a guarantee of, or similar
credit support to, any Indebtedness of such
Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness),
(ii) be directly or indirectly liable for
any Indebtedness of such Subsidiary or
(iii) be directly or indirectly liable for
any other Indebtedness which provides that the holder
thereof may (upon notice, lapse of time or both)
declare a default thereon (or cause the payment
thereof to be accelerated or payable prior to its
final scheduled maturity) upon the occurrence of a
default with respect to any other Indebtedness that
is Indebtedness of such Subsidiary (including any
corresponding right to take enforcement action
against such Subsidiary),
except in the case of clause (i) or (ii) to the extent
(i) that the Company or such Restricted Subsidiary could
otherwise provide such a guarantee or incur such Indebtedness (other
than as Permitted Indebtedness) pursuant to Section 4.03 and
(ii) the provision of such guarantee and the incurrence of
such Indebtedness otherwise would be permitted under Section 4.04.
The Trustee will be provided with an Officers' Certificate stating that such
designation is permitted and setting forth the basis upon which the calculations
required by this definition were computed, together with a copy of the board
resolution adopted by the Board of Directors of the Company making such
designation.
The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (A) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (B) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
of the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
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"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in the "Exchange Rates" column under the heading "Currency
Trading" on the date two Business Days prior to such determination.
Except as described in Section 4.03, whenever it is necessary
to determine whether the Company has complied with any covenant in this
Indenture or a Default has occurred and an amount is expressed in a currency
other than U.S. dollars, such amount will be treated as the U.S. Dollar
Equivalent determined as of the date such amount is initially determined in such
currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares and other
legally required qualifying shares) is owned by the Company or one or more
Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.07
"Bankruptcy Law" 6.01
"Blockage Notice" 10.03
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Event of Default" 6.01
"legal defeasance option" 8.01(b)
"Legal Holiday" 13.08
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Defined in
Term Section
---- -------
"pay its Subsidiary Guaranty" 12.03
"pay the Securities" 10.03
"Payment Blockage Period" 10.03
"Payment Default" 10.03, 12.03
"Permitted Indebtedness" 4.03(b)
"Registrar" 2.03
"Subsidiary Guaranty Blockage Notice" 12.03
"Subsidiary Guaranty Payment Blockage
Period" 12.03
"Successor Company" 5.01(a)(1)
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on this Indenture securities means the Company and
any other obligor on this Indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
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(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally
issued shall refer to the Issue Date.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture
("Exhibit A"). The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its
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authentication. The terms of the Securities set forth in the Appendix and
Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been duly and
validly authenticated and issued under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Upon receipt of a Company Order, the Trustee or
authenticating agent shall authenticate the Securities for original issue up to
the aggregate principal amount stated in the Securities. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar, Paying
Agent or agent for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary
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incorporated or organized within The United States of America may act as Paying
Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints The Depositary Trust Company
("DTC") to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal or interest
when so becoming due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Securities and shall notify
the Trustee of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed by the Paying Agent. Upon complying with this
Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders that complies with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee, in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request
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to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met.
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a protected purchaser.
If the principal amount of and interest due on any Security is
considered paid under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
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SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at any office
or agency maintained by the Company for that purpose and such exchange shall be
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute, and the Trustee shall
authenticate and make available for delivery in exchange therefor, one or more
definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall be entitled to the
same benefits under this Indenture as a Holder of definitive Securities.
SECTION 2.10. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation. The Trustee shall dispose of such cancelled Securities in
accordance with its customary procedures unless the Company directs the Trustee
to deliver canceled Securities to the Company. Upon written request of the
Company, certification of the destruction of all canceled Securities will be
delivered to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation
for any reason other than in connection with a transfer or exchange.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
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SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.
SECTION 2.13. Issuance of Additional Securities. The Company
shall be entitled, subject to its compliance with Section 4.03, to issue
Additional Securities under this Indenture which shall have identical terms as
the Initial Securities issued on the Issue Date, other than with respect to the
date of issuance and issue price. The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor shall be treated as a single class for
all purposes under this Indenture.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors and an Officers'
Certificate, a copy of each which shall be delivered to the Trustee, the
following information:
(1) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price, the issue date and the CUSIP number of
such Additional Securities; provided, however, that no Additional
Securities may be issued at a price that would cause such Additional
Securities to have "original issue discount" within the meaning of
Section 1273 of the Code; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Initial Securities as
set forth in the Appendix to this Indenture or shall be issued in the
form of Exchange Securities as set forth in Exhibit A.
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ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
Except as required under Section 3.07, the Company shall give
each notice to the Trustee provided for in this Section at least 30 days before
the redemption date unless the Trustee consents to a shorter period. Such notice
shall be accompanied by an Officers' Certificate from the Company to the effect
that such redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly in writing of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
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(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Except for a
redemption pursuant to paragraph 5(b) of the Securities, on or prior to 10:00
a.m., New York time, on the redemption date, the Company shall deposit with the
Trustee or Paying Agent (or, if the Company or a Subsidiary is the Paying Agent,
shall segregate and hold in trust) an amount of money sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on the
redemption date other than Securities or portions of Securities called for
redemption which have been delivered by the Company to the Trustee for
cancellation. The Trustee or the Paying Agent will promptly
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return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price
of, and accrued interest, if any, on all Securities to be redeemed.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof), the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of that Security (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the principal amount of
the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC (unless the SEC will not
accept such a filing and commencing with the effectiveness of the Exchange Offer
or Shelf Registration Statement) and will in any event provide the Trustee and
Securityholders within 15 days after it files with the SEC with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be so
filed and provided at the times specified for the filing of such information,
documents and reports
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under such Sections; provided, however, that the Company shall not be so
obligated to file such reports with the SEC, if the SEC does not permit such
filing, in which event the Company will make available such information to the
Trustee and Securityholders within 15 days after the time the Company would be
required to file such information with the SEC if it were subject to Section 13
or 15(d) of the Exchange Act. In addition, the Company shall furnish to the
Holder of the Securities and to prospective investors, upon the requests of such
Holders, any information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act so long as the Securities are not freely transferable
under the Securities Act. The Company also shall comply with the other
provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers' Certificate).
SECTION 4.03. Limitation on Indebtedness. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and its
Restricted Subsidiaries shall be entitled to Incur Indebtedness (including
Additional Securities issued after the Issue Date) if, on the date of such
Incurrence and after giving effect thereto on a pro forma basis, no Default has
occurred and is continuing and the Consolidated Coverage Ratio exceeds 2 to 1.
(b) Notwithstanding the foregoing paragraph (a), the Company
and the Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness ("Permitted Indebtedness"):
(1) Indebtedness Incurred by the Company and its Restricted
Subsidiaries pursuant to the Credit Agreement; provided, however, that,
immediately after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this clause (1) and
then outstanding does not exceed the greater of (A) $165.0 million less
the sum of all mandatory principal payments with respect to such
Indebtedness pursuant to Section 4.06(a)(3)(A) (which principal
payments in the case of revolving loans are accompanied by a
corresponding permanent commitment reduction) and (B) the sum of (x)
65% of the book value of the inventory of the Company and its
Restricted Subsidiaries and (y) 85% of the book value of
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the accounts receivable of the Company and its Restricted Subsidiaries;
(2) Indebtedness owed to and held by the Company or a
Restricted Subsidiary; provided, however, that (A) any subsequent
issuance or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
a Restricted Subsidiary or to the holder of a Lien permitted under this
Indenture) shall be deemed, in each case, to constitute the Incurrence
of such Indebtedness by the obligor thereon and (B) if the Company is
the obligor on such Indebtedness and the holders of Bank Indebtedness
do not have a security interest therein or the obligee is a Restricted
Subsidiary that is not a Guarantor, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations
with respect to the Securities;
(3) the Securities and the Exchange Securities and related
Guarantees (other than any Additional Securities);
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1) or (3) of this Section 4.03(b));
(5) Refinancing Indebtedness;
(6) Hedging Obligations of the Company or any Restricted
Subsidiary not for the purpose of speculation;
(7) obligations in respect of letters of credit, performance,
bid, surety, appeal and other similar bonds and completion guarantees,
payment obligations in connection with self-insurance or similar
requirements provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
(8) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Indebtedness is extinguished within five
Business Days of its Incurrence;
(9) Indebtedness (including Capital Lease Obligations)
Incurred by the Company or any of its Restricted Subsidiaries to
finance the purchase, lease, construction or improvement of property
(real or personal) or equipment (whether through the
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direct purchase of assets or the Capital Stock of any Person owning
such assets) within 180 days after such purchase, lease or improvement
in an aggregate principal amount which, when added together with the
amount of Indebtedness Incurred pursuant to this clause (9) and then
outstanding, does not exceed $5.0 million (including any Refinancing
Indebtedness with respect thereto);
(10) Indebtedness Incurred and outstanding on or prior to the
date on which such Person was acquired by the Company or any Restricted
Subsidiary or assumed by the Company or a Restricted Subsidiary at the
time of acquisition of all or any portion of the assets (or any
business or product line of another Person) (other than Indebtedness
Incurred in connection with or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Subsidiary became
a Restricted Subsidiary or was acquired by the Company); provided,
however, at the time of such acquisition and after giving effect
thereto, the aggregate principal amount of all Indebtedness Incurred
pursuant to this clause (10) and then outstanding does not exceed $5.0
million;
(11) any Guarantee (including the Subsidiary Guaranties) by
the Company or a Restricted Subsidiary of Indebtedness or other
obligations of the Company or any of its Restricted Subsidiaries so
long as the Incurrence of such Indebtedness by the Company or such
Restricted Subsidiary is permitted under the terms of this Indenture;
(12) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case, Incurred or assumed in connection with the disposition or
acquisition of any business, assets or a Restricted Subsidiary of the
Company; and
(13) Indebtedness of the Company or of any of its Restricted
Subsidiaries in an aggregate principal amount which, when taken
together with all other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the date of such Incurrence (other than
Indebtedness permitted by clauses (1) through (12) above or paragraph
(a)), does not exceed $12.5 million (which amount may, but need not be,
Incurred in whole or in part under the Credit Agreement.
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(c) Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor shall Incur any Indebtedness pursuant to Section 4.03(b)
(other than (b)(1) above or under the Credit Agreement pursuant to (b)(13)
above) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or any Subsidiary Guarantor unless
such Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.
(d) Notwithstanding Sections 4.03(a) and 4.03(b) above,
neither the Company nor any Subsidiary Guarantor shall Incur (1) any
Indebtedness if such Indebtedness is subordinate in right of payment to any
Senior Indebtedness of the Company or such Subsidiary Guarantor, as applicable,
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, or (2) any Secured
Indebtedness (for borrowed money including Capital Lease Obligations) that is
not Senior Indebtedness of such Person (other than Indebtedness solely between
or among the Company and a Subsidiary Guarantor or between or among the
Subsidiary Guarantors) unless contemporaneously therewith such Person makes
effective provision to secure the Securities or the relevant Subsidiary
Guaranty, as applicable, equally and ratably with such Secured Indebtedness for
so long as such Secured Indebtedness is secured by a Lien.
(e) For purposes of determining compliance with this covenant,
(1) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses and (2) the Company will be entitled to divide and classify
an item of Indebtedness in more than one of the types of Indebtedness described
above and (3) the Company will be entitled from time to time to reclassify any
Indebtedness Incurred pursuant to any clause in paragraph (b) above such that it
will be deemed as having been Incurred under another clause in paragraph (b).
Accrual of interest, accretion or amortization of original issue discount, the
payment of interest on any Indebtedness in the form of additional Indebtedness
with the same terms, the payment of dividends on Disqualified Stock in the form
of additional shares of the same class of Disqualified Stock and change in the
amount outstanding due solely to the result of fluctuations in the exchange
rates of currencies will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section 4.03.
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(f) For purposes of determining compliance with any U.S.
dollar restriction on the Incurrence of Indebtedness where the Indebtedness
Incurred is denominated in a different currency, the amount of such Indebtedness
shall be the U.S. Dollar Equivalent determined on the date of the Incurrence of
such Indebtedness, provided, however, that if any such Indebtedness denominated
in a different currency is subject to a Currency Agreement with respect to U.S.
dollars covering all principal, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars shall be
as provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
shall be the U.S. Dollar Equivalent of the Indebtedness Refinanced, except to
the extent that (1) such U.S. Dollar Equivalent was determined based on a
Currency Agreement, in which case the Refinancing Indebtedness shall be
determined in accordance with the preceding sentence, and (2) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the
Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent of such
excess shall be determined on the date such Refinancing Indebtedness is
Incurred.
SECTION 4.04. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to, make a Restricted Payment if, at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00
of Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date (the amount expended for
such purpose if other than in cash, having the fair market value of
such property as determined in good faith by the Company) would exceed
the sum of (without duplication):
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the first
fiscal quarter ending after the Issue Date occurs to the end
of the most recent fiscal quarter for which internal financial
statements are available on or prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit); plus
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(B) 100% of the aggregate Net Cash Proceeds received
by the Company from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the Issue Date
(other than an issuance or sale to a Subsidiary of the
Company) and 100% of any cash capital contribution received by
the Company from its shareholders subsequent to the Issue
Date; plus
(C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion
or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the
Company for Capital Stock (other than Disqualified Stock) of
the Company (less the amount of any cash, or the fair value of
any other property, distributed by the Company upon such
conversion or exchange); plus
(D) an amount equal to the sum of (x) the net
reduction in the Investments made by the Company or any
Restricted Subsidiary in any Person resulting from
repurchases, repayments or redemptions of such Investments by
such Person, proceeds realized on the sale of such Investment
and proceeds representing the return of capital, in each case
received by the Company or any Restricted Subsidiary, and (y)
to the extent such Person is an Unrestricted Subsidiary, the
portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of
such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall
not exceed, in the case of any such Person, the amount of
Investments (excluding Permitted Investments) previously made
(and treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Person.
(b) The preceding provisions of Section 4.04(a) shall not
prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds
of the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees to the
extent that the purchase by such plan or trust is financed by
Indebtedness of such plan or trust to the Company or any Restricted
Subsidiary
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or Indebtedness Guaranteed by the Company or a Restricted Subsidiary)
or a substantially concurrent cash capital contribution received by the
Company from its shareholders; provided, however, that (A) such
Restricted Payment shall be excluded in the calculation of the amount
of Restricted Payments and (B) the Net Cash Proceeds from such sale or
such cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts
under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred pursuant to Section 4.03; provided, however,
that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.04; provided, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of, shares of, or options to purchase
shares of, common stock or preferred stock of the Parent or the Company
or any of its Subsidiaries by the Company or any of its Subsidiaries
(or payments paid to the Parent to consummate such repurchases or other
acquisitions in accordance with the provisions of this clause (4)) from
employees, former employees, directors, consultants, former consultants
or former directors of the Company or any of its Subsidiaries upon the
death, disability or termination of employment of such employees,
directors or consultants, pursuant to the terms of the agreements
(including employment and consulting agreement or amendments thereto)
or plans approved by the Board of Directors; provided, however, that
the aggregate amount of such repurchases and other acquisitions shall
not exceed the sum of (A) $2.5 million in any fiscal year and (B) the
cash proceeds of any "key man" life insurance policies that are used to
make such repurchases; provided, however, that amounts not used
pursuant to this clause (4) in a year may be carried forward for use in
future years; provided, further, however, that
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such repurchases and other acquisitions shall be included in the
calculation of the amount of Restricted Payments;
(5) the Transactions; provided, however, that Restricted
Payments used to effect the Transactions will be excluded in the
calculation of the amount of Restricted Payments;
(6) dividends, loans, advances or other distributions to
Parent to be used by Parent solely (a) to pay its franchise taxes and
other fees required to maintain its corporate existence and to pay for
general corporate and overhead expenses (including salaries and other
compensation of the employees, directors fees, indemnification
obligations, professional fees and expenses) Incurred by Parent in the
ordinary course of its business; provided, however, that such dividends
shall not exceed $750,000 in any calendar year; provided, further,
however, that such dividends shall be excluded in the calculation of
the amount of Restricted Payments;
(7) payments to Parent in respect of Federal, state, foreign
and local taxes attributable to (or arising as a result of) the
operations of the Company and its Subsidiaries; provided, however, that
the amount of such payments in any fiscal year do not exceed the amount
that the Company and its Subsidiaries would be required to pay in
respect of Federal, state, foreign and local taxes for such fiscal year
were the Company to pay such taxes as a stand-alone taxpayer (whether
or not all such amounts are actually used by Parent for such purposes);
provided, further, however, that such payments shall be excluded in the
calculation of the amount of Restricted Payments;
(8) repurchase of Capital Stock deemed to occur upon the
exercise of stock options or warrants if such Capital Stock represents
a portion of the exercise price thereof and repurchases of Capital
Stock deemed to occur upon the withholding of a portion of the Capital
Stock granted or awarded to an employee to pay for the statutory
minimum taxes payable by such employee upon such grant or award;
provided, however, that such amount shall be excluded in the
calculation of the amount of Restricted Payments; or
(9) Restricted Payments not exceeding $7.5 million in the
aggregate; provided, however, that (A) at the time of such Restricted
Payments, no Default shall have occurred and be continuing (or result
therefrom) and (B) such Restricted Payments shall be included in the
calculation of the amount of Restricted Payments.
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SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date (including this Indenture
and the Credit Agreement);
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or Refinancings of the
Indebtedness referred to in any of the foregoing clauses and
restrictions contained in Indebtedness incurred after the date hereof
in accordance with the terms of this Indenture; provided that such
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or Refinancings are not
materially more restrictive with respect to such dividend and other
payment restrictions than those contained in the applicable instrument
governing such indebtedness as in effect on the date of this Indenture;
provided that, with respect to any agreement governing such other
Indebtedness, the provisions relating to such encumbrance or
restriction are no less favorable to the Company in any material
respect as determined by the Company in its reasonable and good faith
judgment than the provisions contained in the Credit Agreement as in
effect on the Issue Date;
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(iv) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(v) any such encumbrance or restriction consisting of
customary non-assignment provisions in contracts or in leases governing
leasehold interest and in intellectual property contracts and licenses;
(vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of assets (including Capital Stock) of such Restricted
Subsidiary permitted by this Indenture pending the closing of such sale
or disposition;
(vii) any restriction arising under applicable law, regulation
or order;
(viii) restrictions contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages; and
(ix) restrictions on the transfer of assets subject to any
Lien permitted under this Indenture imposed by the holder of such Lien.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition unless:
(1) The Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to
the fair market value (including as to the value of all non-cash
consideration), as determined in good faith by the Company, or in the
case of an Asset Disposition in excess of $10 million, by the Board of
Directors of the Company, of the shares and assets subject to such
Asset Disposition;
(2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash
equivalents; and
(3) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such
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Restricted Subsidiary, as the case may be) pursuant to one or more of
the following:
(A) to the extent the Company elects (or is required
by the terms of any Indebtedness), to prepay, repay, redeem or
purchase Senior Indebtedness of the Company (including cash
collateralization of letters of credit and similar credit
transactions constituting Senior Indebtedness) or Indebtedness
(other than any Disqualified Stock) of a Restricted Subsidiary
(or, in the case of a revolving credit facility, effect a
permanent reduction in availability thereunder regardless of
the fact that no prepayment may be required) (in each case
other than Indebtedness owed to the Company or a Subsidiary of
the Company) or repay Indebtedness secured by such asset
within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash;
(B) to the extent of the balance of such Net
Available Cash after application (if any) in accordance with
clause (A), to the extent the Company elects, to acquire
Additional Assets within one year from the later of the date
of such Asset Disposition or the receipt of such Net Available
Cash; and
(C) to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B), to make an offer to the holders of the Securities
(and to holders of other Senior Subordinated Indebtedness of
the Company designated by the Company) to purchase Securities
at 100% of their principal amount thereof (and such other
Senior Subordinated Indebtedness of the Company) pursuant to
and subject to the conditions of Section 4.06(b);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary shall permanently retire such Indebtedness and shall cause
the related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06,
the Company and the Restricted Subsidiaries will not be required to apply any
Net Available Cash in accordance with this Section 4.06 (a) except to the extent
that the aggregate Net Available
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Cash from all Asset Dispositions which is not applied in accordance with this
Section 4.06 (a) exceeds $10.0 million. Pending application of Net Available
Cash pursuant to this Section 4.06 (a), such Net Available Cash may be invested
in a manner not prohibited by this Indenture and/or applied to temporarily
reduce revolving credit indebtedness.
For the purposes of this Section 4.06(a)(2), any of the
following are deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company or any
Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition;
(2) securities, notes or other obligations received by the
Company or any Restricted Subsidiary from the transferee that are
converted by the Company or such Restricted Subsidiary into cash within
90 days after the date of such Asset Disposition (to the extent of the
cash received); and
(3) any Additional Assets (so long as such Additional Assets
are acquired for fair market value in connection with the transaction
giving rise to such Asset Disposition, as determined in good faith by
the Board of Directors of the Company or such Restricted Subsidiary, as
applicable).
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to Section 4.06 (a)(3)(C), the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Subordinated Indebtedness) at a purchase price of 100% of
their principal amount (or, in the event such other Senior Subordinated
Indebtedness of the Company was issued with significant original issue discount,
100% of the accreted value thereof) without premium, plus accrued but unpaid
interest (or, in respect of such other Senior Subordinated Indebtedness of the
Company, such lesser price, if any, as may be provided for by the terms of such
Senior Subordinated Indebtedness) in accordance with the procedures (including
prorating in the event of oversubscription) set forth in this Indenture. If the
aggregate purchase price of the securities tendered exceeds the Net Available
Cash allotted to their purchase, the Company shall select the securities to be
purchased on a pro rata basis but in round denominations, which in the case of
the Securities shall be denominations of $1,000 principal amount or multiples
thereof. The Company shall not be required to make such an offer to purchase
Securities (and other
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Senior Subordinated Indebtedness of the Company) pursuant to this Section 4.06
if the Net Available Cash available therefor is less than $10.0 million (which
lesser amount shall be carried forward for purposes of determining whether such
an offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition). Upon completion of each offer to purchase Securities
pursuant to this Section 4.06, the amount of Net Available Cash will be reset to
zero.
(c) The Company will comply with the notice requirements of
Section 3.03 and, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this Section 4.06. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 4.06, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.06 by virtue of its compliance
with such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are not materially
less favorable to the Company or such Restricted Subsidiary than those
that could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess
of $2.0 million, a majority of the Board of Directors of the Company
have determined in good faith that the criteria set forth in clause (1)
are satisfied and have approved the relevant Affiliate Transaction as
evidenced by a resolution of the Board of Directors; and
(3) if such Affiliate Transaction involves an amount in excess
of $10.0 million, the Board of Directors of the Company shall also have
received a written opinion from an Independent Qualified Party to the
effect that such Affiliate Transaction is fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or is not
materially less favorable to
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the Company and its Restricted Subsidiaries than could reasonably be
expected to be obtained at the time in an arm's-length transaction with
a Person who was not an Affiliate.
(b) The provisions of Section 4.07 (a) shall not apply to:
(1) any Investment (including a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to
Section 4.04;
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Company;
(3) loans or advances to employees or consultants in the
ordinary course of business, but in any event not to exceed $2.0
million in the aggregate outstanding at any one time;
(4) the payment of reasonable fees and compensation to, the
provision of employee benefit arrangements and indemnity for the
benefit of, directors, officers, employees and consultants of the
Company and its Restricted Subsidiaries;
(5) any Affiliate Transaction between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company and loans or advances to employees
to purchase Capital Stock;
(7) any agreement with the Company or any Restricted
Subsidiary as in effect as of the Issue Date or any amendment or
replacement thereto or any transaction contemplated thereby (including
pursuant to any amendment or replacement thereto) so long as any such
amendment or replacement agreement is not more disadvantageous to the
Company or such Restricted Subsidiary in any material respect than the
original agreement as in effect on the Issue Date;
(8) the payment of management, consulting and advisory fees
and related expenses made pursuant to the Harvest Management Services
Agreement as in effect on the Issue Date or any amendment or
replacement thereto or any transaction contemplated thereby (including
pursuant to any amendment or replace-
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ment thereto) so long as any such amendment or replacement agreement
is not more disadvantageous to the Company or such Restricted
Subsidiary in any material respect than the original agreement as in
effect on the Issue Date;
(9) any consulting or employment agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business consistent with the past practice of the Company or such
Restricted Subsidiary, and
(10) any tax sharing agreement or arrangement and payments
pursuant thereto among the Company and its Subsidiaries and other
Person (including Parent) with which the Company or its Subsidiaries is
required or permitted to file a consolidated tax return or with which
the Company or any of its Restricted Subsidiaries is or could be part
of a consolidated group for tax purposes in amounts not otherwise
prohibited by this Indenture.
SECTION 4.08. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries. The Company
(1) shall not, and shall not permit any Restricted Subsidiary
to, sell, lease, transfer or otherwise dispose of any Capital Stock of
a Restricted Subsidiary to any Person (other than the Company or a
Restricted Subsidiary), and
(2) shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell or otherwise dispose of any of its Capital
Stock (other than, if necessary, shares of its Capital Stock
constituting directors' or other legally required qualifying shares) to
any Person (other than to the Company or a Restricted Subsidiary),
unless
(A) immediately after giving effect to such issuance, sale or
other disposition, neither the Company nor any of its Subsidiaries own
any Capital Stock of such Restricted Subsidiary; or
(B) immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect thereto would have been permitted to be
made under Section 4.04 if made on the date of such issuance, sale or
other disposition; or
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(C) the sale or issuance of Capital Stock if the proceeds
therefrom are applied in accordance with Section 4.06.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
repurchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof on the date of purchase plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), In the event that at the time of such Change of Control
the terms of the Senior Indebtedness of the Company restrict or prohibit the
repurchase of Securities pursuant to this Section, then prior to the mailing of
the notice to Holders provided for in Section 4.09(b) below but in any event
within 30 days following any Change of Control, the Company shall (1) repay in
full all such Senior Indebtedness or offer to repay in full all such
Indebtedness and repay the Indebtedness of each lender who has accepted such
offer or (ii) obtain the requisite consent under the agreements governing such
Senior Indebtedness to permit the repurchase of the Securities as provided for
in Section 4.09(b).
(b) Within 30 days following any Change of Control, unless the
Company has exercised its option to redeem all the Securities as described in
paragraph 5(b) of the Securities, the Company shall mail a notice to each Holder
with a copy to the Trustee (the "Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and unpaid
interest, if any, to the date of such purchase (subject to the right of
Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control;
(3) the purchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent
with this Section 4.09, that a Holder must follow in order to have its
Securities purchased.
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(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, the Company will, to the extent
lawful:
(1) accept for payment all Securities or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
purchase price plus accrued and unpaid interest, if any, in respect of
all Securities or portions of Securities properly tendered; and
(3) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating
the aggregate principal amount of Securities or portions of Securities
being purchase by the Company.
The Paying Agent will promptly mail to each Holder of
Securities properly tendered the purchase price plus accrued and unpaid
interest, if any, for such Securities, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
of a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any. The Company will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the purchase
date.
(e) Notwithstanding the foregoing provisions of this Section,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.09 applicable to a Change of Control Offer made by the Company
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.
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(f) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue of its
compliance with such securities laws or regulations.
SECTION 4.10. Future Guarantors. The Company shall cause each
domestic Restricted Subsidiary that guarantees or incurs any Indebtedness under
the Credit Agreement to, at the same time, execute and deliver to the Trustee a
Guaranty Agreement pursuant to which such Restricted Subsidiary shall Guarantee
payment of the Securities on the same terms and conditions as those set forth in
this Indenture.
SECTION 4.11. Compliance Certificate. The Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company, an Officers' Certificate, one of the signers of which shall be the
principal executive officer, principal financial officer or principal accounting
officer of the Company, stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
SECTION 4.12. Further Instruments and Acts. Upon request of
the Trustee, the Company shall execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless
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(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing
(3) immediately after giving pro forma effect to such
transaction, the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 4.03(a); and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
provided, however, that (i) the Company may effect the Transactions (and clause
(4) will not be applicable), and (ii) clause (3) will not be applicable to (A) a
Restricted Subsidiary consolidating with, merging into or transferring all or
part of its properties and assets to the Company or another Restricted
Subsidiary or (B) the Company merging with an Affiliate of the Company solely
for the purpose and with the sole effect of reincorporating the Company in
another jurisdiction.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
in the case of a lease, shall be released from the obligation to pay the
principal of and interest on the Securities.
The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person (other than the Company or the Subsidiary Guarantor) unless:
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(1) except in the case of a Subsidiary Guarantor that has been
disposed of in its entirety to another Person (other than to the
Company or a Subsidiary of the Company), whether through a merger,
consolidation or sale of Capital Stock or assets, if in connection
therewith the Company provides an Officers' Certificate to the Trustee
to the effect that the Company shall comply with its obligations under
Section 4.06 in respect of such disposition, the resulting, surviving
or transferee Person (if not such Subsidiary) shall be a Person
organized and existing under the laws of the jurisdiction under which
such Subsidiary was organized or under the laws of the United States of
America, or any State thereof or the District of Columbia, and such
Person shall expressly assume, by a Guaranty Agreement, in a form
satisfactory to the Trustee, all the obligations of such Subsidiary
under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person
as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be
continuing; and
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such Guaranty Agreement, if any,
complies with this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs
if
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon redemption, upon required purchase, upon declaration of
acceleration or otherwise;
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(3) the Company or any Subsidiary Guarantor fails to comply
with Section 5.01;
(4) the Company or any Subsidiary Guarantor fails to comply
with Section 4.03, 4.04, 4.05, 4.06 (other than a failure to purchase
Securities), 4.07, 4.08 or 4.09 and such failure continues for 30 days
after the notice specified below;
(5) the Company or any Subsidiary Guarantor fails to comply
with any of its agreements in the Securities or this Indenture and such
failure continues for 60 days after the notice specified below;
(6) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $10.0
million, or its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
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(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money (other
than judgments which are covered by enforceable insurance policies
issued by solvent carriers) in excess of $10.0 million is entered
against the Company or any Significant Subsidiary, and remains
undischarged, unpaid, unwaived or unstayed for a period of 60
consecutive days following the entry of such judgment or decree becomes
final and non-appealable; or
(10) any Subsidiary Guaranty of a Significant Subsidiary
ceases to be in full force and effect (other than in accordance with
the terms of such Guaranty) for 30 days after notice or any Subsidiary
Guarantor that is a Significant Subsidiary denies or disaffirms its
obligations under its Guaranty.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4), (5) and (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the outstanding Securities notify the Company and the Trustee of the Default and
the Company does not cure such Default within the time specified after receipt
of such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) (subject to Section 6.05(b)) or (10)
and any event which with the giving of notice or the lapse of time would become
an Event of Default under clause (4), (5), (9) or (10) its status and what
action the Company is taking or proposes to take with respect thereto.
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SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. Subject to Section
6.02, the Holders of a majority in aggregate principal amount of the outstanding
Securities by notice to the Trustee may waive an existing Default and its
consequences except (i) a Default in the payment of the principal of or interest
on a Security, (ii) a Default arising from the failure to redeem or purchase any
Security when required pursuant to this Indenture or (iii) a Default in respect
of a provision that under Section 9.02 cannot be amended without the consent of
each Securityholder affected. When a Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or impair any
consequent right.
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SECTION 6.05. Control by Majority. (a) The Holders of a
majority in principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
(b) Notwithstanding the foregoing, in the event of a
declaration of acceleration in respect of the Securities because an Event of
Default specified in Section 6.01(6) above shall have occurred and be
continuing, such declaration of acceleration shall be automatically annulled if
the Indebtedness that is the subject of such Event of Default has been
discharged or paid or such Event of Default shall have been cured or waived by
the holders of such Indebtedness and written notice of such discharge, cure or
waiver, as the case may be, shall have been given to the Trustee by the Company
or by the requisite holders of such Indebtedness or a trustee, fiduciary or
agent for such holders, within 30 days after such declaration of acceleration in
respect of the Securities and (i) no Person shall have commenced judicial
proceedings to foreclose upon assets of the Company or any of its Restricted
Subsidiaries or shall have exercised any right under applicable law or
applicable security documents to take ownership of any of such assets in lieu of
foreclosure and (ii) no other Event of Default with respect to the Securities
shall have occurred which has not been cured or waived during such 30-day
period.
SECTION 6.06. Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
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(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
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SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order at the date or dates fixed by the Trustee and, in the case
of distribution of such money on account of principal, premium, if any, or
interest, if any, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company and,
if such money or property has been collected from a Subsidiary
Guarantor, to holders of Senior Indebtedness of such Subsidiary
Guarantor, in each case to the extent required by Articles 10 and 12;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the
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benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing (and is not cured), the Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use under
the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
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(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of the outstanding Securities.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the corporate trust office of the Trustee,
and such notice references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
(j) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions
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pursuant to this Indenture, which Officers' Certificate may be signed by any
person authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.
(k) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as duties.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days and apply to the SEC for permission to
continue as trustee or resign. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing with respect to the Securities and if it is known to the Trustee, the
Trustee shall mail to each Securityholder notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of principal of or
interest on any Security (including payments pursuant to the mandatory
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA Section 313(a) if such report is required (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date,
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no report need be transmitted). The Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses Incurred or made by it, including costs of
collection, in connection with the exercise or performance of any of its powers
or duties hereunder, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
expense (including attorneys' fees and expenses) Incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have one separate counsel (if the Trustee determines
in its reasonable judgment that the need for separate counsel exists (due to a
conflict of interest or otherwise)) and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith. The Company need
not pay any settlement made without its consent, which consent shall not be
unreasonably withheld.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the resignation and removal of the Trustee and the satisfaction
and discharge of this Indenture. When the Trustee
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incurs expenses after the occurrence of a Default specified in Section 6.01(7)
or (8) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in aggregate
principal amount of the outstanding Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee fails to comply with TIA Section 310(b) after
written request therefor by the Company;
(3) the Trustee is adjudged bankrupt or insolvent;
(4) a receiver or other public officer takes charge of the
Trustee or its property; or
(5) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in aggregate principal amount of the outstanding
Securities and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee, without further act, deed or conveyance, shall have all the
rights, powers and duties of the retiring Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07. No
successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under the TIA.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the
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outstanding Securities may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
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creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (1) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities, the Subsidiary
Guaranties and this Indenture ("legal defeasance option") or (2) its obligations
under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09 and 4.10 and the
operation of Sections 5.01, 6.01(3), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but,
in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Section 5.01(3) ("covenant
defeasance option"), and the Securities will thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but will continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities will not be deemed
outstanding for accounting purposes). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment
of the Securities and the Guarantees may not be accelerated because of an Event
of Default with respect thereto. If the Company
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exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7) and 6.01(8) (but, in the case of such sections, with respect
only to Significant Subsidiaries) or because of the failure of the Company to
comply with Section 5.01(a)(3). If the Company exercises its legal defeasance
option or its covenant defeasance option, each Guarantor, if any, shall be
released from all of its obligations with respect to its Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Event of Defaults from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(4) defeasance does not result in a breach or violation of, or
constitute a default under, this Indenture (other than a
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breach or violation of the Indenture resulting from the borrowing of
funds to be applied to such deposit and the grant of any Lien securing
such borrowing), the Credit Agreement or any other material agreement
or instrument binding on the Company or any of its Restricted
Subsidiaries and is not prohibited by Article 10;
(5) the Company must have delivered to the Trustee an Opinion
of Counsel to the effect that, subject to customary circumstances and
conditions, after the 91st day following the deposit, the trust fund
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
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SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations
deposited pursuant to this Article 8 or the principal and interest received on
such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the
Subsidiary Guarantor and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder
(1) to cure any ambiguity, omission, mistake, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the Securities;
(5) to add to the covenants of the Company or a Subsidiary
Guarantor for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company or a Subsidiary Guarantor;
(6) to make any change that does not adversely affect the
rights of any Securityholder; or
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Guarantor then outstanding unless the
holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securi-
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tyholders, or any defect therein, shall not impair or affect the validity of an
amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company, the
Subsidiary Guarantor and the Trustee may amend this Indenture, the Securities or
the Escrow Agreement without notice to any Securityholder but with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Securities then outstanding (voting as a single class) (including consents
obtained in connection with a tender offer for, exchange for or purchase of the
Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) impair the right of any Securityholder to receive payment
of principal of and interest on such Securityholder's Securities on or
after the due dates therefor or to institute suit for the enforcement
of any payment on or with respect to such Securityholder's Securities;
(7) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders;
(8) make any change in Section 6.04, 6.07 or 6.10 or the
second sentence of this Section;
(9) make any change in any Guaranty that would adversely
affect the Securityholders in any material respect; or
(10) reduce the percentage of the principal amount of
outstanding securities necessary for amendment to or waiver of
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compliance with any provision of this Indenture or the Securities or
for waiver of any default.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
Section 2.08 hereof shall determine which Securities are
considered to be "outstanding" for purposes of this Section 9.02.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preced-
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ing paragraph, those Persons who were Securityholders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, in addition to the documents required by
Section 13.04, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Subsidiary of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid and is paid to all Holders that so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that
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the Indebtedness evidenced by the Securities and all other Subordinated
Securities Obligations are subordinated in right of payment, to the extent and
in the manner provided in this Article 10, to the prior payment in full in cash
of all Senior Indebtedness of the Company and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Securities shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
which is Senior Indebtedness of the Company shall rank senior to the Securities
in accordance with the provisions set forth herein. All provisions of this
Article 10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution upon a total or partial liquidation or dissolution of
the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property,
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash or cash equivalents of such
Senior Indebtedness before Securityholders shall be entitled to receive
any payment on the Securities;
(2) until such Senior Indebtedness of the Company is paid in
full in cash or cash equivalents, any payment or distribution to which
Securityholders would be entitled but for this Article 10 shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that Securityholders may receive shares of stock and any debt
securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Securities; and
(3) if a distribution is made to Securityholders that, due to
the provisions of this Article 10, should not have been made to them,
then the Securityholders shall hold such distribution in trust for
holders of the Senior Indebtedness and pay such distribution to such
holders as their interests may appear.
For purposes of this Section only, "cash equivalents" shall
mean Temporary Cash Investments.
SECTION 10.03. Default on Senior Indebtedness of the Company.
The Company shall not pay the principal of, premium, if any, or interest, if
any, on the Securities or other Subordinated Securities Obligations or make any
deposit pursuant to Section 8.01
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and may not purchase, redeem or otherwise retire any Securities or other
Subordinated Securities Obligations (collectively, "pay the Securities") if
either of the following (a "Payment Default") occurs:
(1) any Designated Senior Indebtedness of the Company is not
paid in full in cash when due; or
(2) any other default on Designated Senior Indebtedness of the
Company occurs and the maturity of such Designated Senior Indebtedness
is accelerated in accordance with its terms
unless, in either case, the Payment Default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash; provided, however, that the Company shall be entitled
to pay the Securities and any other Subordinated Securities Obligations without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representatives of all Designated Senior
Indebtedness with respect to which the Payment Default has occurred and is
continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company shall not pay the
Securities or other Subordinated Securities Obligations for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of the Bank Indebtedness or, if no Bank Indebtedness is
outstanding, the Representative of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter. The Payment Blockage Period shall end earlier if such Payment
Blockage Period is terminated:
(1) by written notice to the Trustee and the Company from the
Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice is
cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full in cash.
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Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section), unless a Payment Default exists, the Company shall be entitled to
resume payments on the Securities and the other Subordinated Securities
Obligations after termination of such Payment Blockage Period. The Securities
shall not be subject to more than one Payment Blockage Period in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of the Company during such period.
For purposes of this Section, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness of the
Company initiating such Payment Blockage Period shall be, or be made, the basis
of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness of the Company (or their Representatives) of the
acceleration.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear. If any Designated Senior
Indebtedness of the Company is outstanding, neither the Company nor any
Subsidiary Guarantor shall pay the Securities until five Business Days after the
Representatives of all the issues of Designated Senior Indebtedness of the
Company receive notice of such acceleration and, thereafter, shall be entitled
to pay the Securities only if this Article 10 otherwise permits payment at that
time.
SECTION 10.06. Subrogation. After all Senior Indebtedness of
the Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Securities) to the rights of holders of such
Senior Indebtedness to receive distributions applicable to such Senior
Indebtedness. A distribution made under this Article 10 to holders of such
Senior Indebtedness which
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otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness of the
Company. Nothing in this Indenture shall
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of holders
of Senior Indebtedness of the Company to receive distributions
otherwise payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent shall continue to
make payments on the Securities and shall not be charged with knowledge of the
existence of facts that under this Article 10 would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
such payments are prohibited by this Article 10. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company shall be entitled to give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of the Company with the same rights it
would have if it were not Trustee. The Registrar and co-registrar and the Paying
Agent shall be entitled to do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness of the Company which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such
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holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative.
Whenever any Person is to make a distribution or give a notice to holders of
Senior Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Indebtedness of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives of Senior Indebtedness of the
Company for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of
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such Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee shall be entitled to defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of the Company as provided in this Article 10 and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness of the Company. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Securityholders or the Company or any other Person, money or assets to which
any holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness of
the Company on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and sev-
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erally, to each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns (a) the full and punctual
payment of principal of and interest on the Securities or other Subordinated
Securities Obligations when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the Securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
this Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Obligations"). Each Subsidiary Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor shall remain bound under this Article 11 notwithstanding any extension
or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) except as set forth in Section 11.06, any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner
set forth in Article 12, subordinated and subject in right of payment to the
prior payment in full of the principal of and premium, if any, and interest on
all Senior Indebtedness of the Subsidiary Guarantor giving such Subsidiary
Guaranty and each Subsidiary Guaranty is made subject to such provisions of this
Indenture.
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Except as expressly set forth in Sections 8.01(b), 11.02 and
11.06, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (1) the unpaid amount of such Obligations, (2) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(3) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full of all Obligations and all obligations to which the
Obligations are subordinated as provided in Article 12. Each Subsidiary
Guarantor further agrees that, as be-
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tween it, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations Guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary
Guaranty herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such Subsidiary Guarantor for the purposes
of this Section. Each Subsidiary Guarantor shall have the right to seek
contribution from any non-paying Subsidiary Guarantor in an amount equal to such
non-paying Subsidiary Guarantor's pro rata portion of such payment based on the
respective net assets of all of the Subsidiary Guarantors at the time of such
payment as determined in accordance with GAAP, so long as the exercise of such
right does not impair the rights of the Holders under the Guaranty.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 11.03. Successors and Assigns. This Article 11 shall
be binding upon each Subsidiary Guarantor and its successors and assigns and
shall enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privi-
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lege. The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 11 at law, in
equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Upon the sale
or other disposition (including by way of consolidation or merger) of a
Subsidiary Guarantor or the sale or disposition of all or substantially all the
assets of such Subsidiary Guarantor (in each case other than a sale or
disposition to the Company or another Subsidiary Guarantor or an Affiliate of
the Company), or if the Company properly designates any Restricted Subsidiary
that is a Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with
the applicable provisions of this Indenture, or at such time a Subsidiary
Guarantor no longer has outstanding any other Indebtedness or Guarantees any
Indebtedness of the Company or another Subsidiary Guarantor, such Subsidiary
Guarantor shall be deemed released from all obligations under this Article 11
without any further action required on the part of the Trustee or any Holder. At
the written request of the Company, upon receipt of an officers' certificate,
the Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement To Subordinate. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Indebtedness evidenced by such Subsidiary Guarantor's Subsidiary Guaranty
and all other Subordinated Securities Obligations are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
prior payment in full in cash of all Senior Indebtedness of such Subsidiary
Guarantor and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. The Obligations of
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a Subsidiary Guarantor shall in all respects rank pari passu with all other
Senior Subordinated Indebtedness of such Subsidiary Guarantor and only Senior
Indebtedness of such Subsidiary Guarantor (including such Subsidiary Guarantor's
Guaranty of Senior Indebtedness of the Company) shall rank senior to the
Obligations of such Subsidiary Guarantor in accordance with the provisions set
forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution upon a total or partial liquidation or dissolution of
such Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property,
(1) holders of Senior Indebtedness of such Subsidiary
Guarantor shall be entitled to receive payment in full in cash of such
Senior Indebtedness before Securityholders shall be entitled to receive
any payment pursuant to the Subsidiary Guaranty of such Subsidiary
Guarantor;
(2) until the Senior Indebtedness of any Subsidiary Guarantor
is paid in full in cash, any payment or distribution to which
Securityholders would be entitled but for this Article 12 shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that Securityholders may receive shares of stock and any debt
securities of such Subsidiary Guarantor that are subordinated to such
Senior Indebtedness to at least the same extent as the Subsidiary
Guaranty;
(3) if a distribution is made to Securityholders that, due to
the provisions of this Article 12, should not have been made to them,
then the Securityholders shall hold such distribution in trust for
holders of the Senior Indebtedness and pay such distribution to such
holders as their interests may appear.
SECTION 12.03. Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor shall make its Subsidiary Guaranty or
purchase, redeem or otherwise retire or defease any Securities or other
Subordinated Securities Obligations (collectively, "pay its Subsidiary
Guaranty") if either of the following (a "Payment Default") occurs:
(1) any Designated Senior Indebtedness of such Subsidiary
Guarantor is not paid in full in cash when due; or
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(2) any other default on Designated Senior Indebtedness of
such Subsidiary Guarantor occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, the Payment Default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash; provided, however, that any Subsidiary Guarantor
shall be entitled to pay its Subsidiary Guaranty or any other Subordinated
Securities Obligations without regard to the foregoing if such Subsidiary
Guarantor and the Trustee receive written notice approving such payment from the
Representatives of all Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of such Subsidiary
Guarantor pursuant to which the maturity thereof may be accelerated without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Subsidiary
Guarantor shall not pay its Subsidiary Guaranty or other Subordinated Securities
Obligations for a period (a "Subsidiary Guaranty Payment Blockage Period")
commencing upon the receipt by the Trustee of (with a copy to such Subsidiary
Guarantor) written notice (a "Subsidiary Guaranty Blockage Notice") of such
default from the Representative of such Designated Senior Indebtedness
specifying an election to effect a Subsidiary Guaranty Payment Blockage Period
and ending 179 days thereafter. The Subsidiary Guaranty Payment Blockage Period
shall end earlier if such Subsidiary Guaranty Payment Blockage Period is
terminated:
(1) by written notice to the Trustee and such Subsidiary
Guarantor from the Person or Persons who gave such Subsidiary Guaranty
Blockage Notice;
(2) because the default giving rise to such Subsidiary
Guaranty Blockage Notice is cured, waived or otherwise no longer
continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section), unless a Payment Default exists, any Subsidiary Guarantor shall be
entitled to resume payments pursuant to its Subsidiary Guaranty and other
Subordinated Securities Ob-
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ligations after termination of such Subsidiary Guaranty Payment Blockage Period.
No Subsidiary Guarantor shall be subject to more than one Subsidiary Guaranty
Payment Blockage Period in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness of such
Subsidiary Guarantor during such period.
For purposes of this Section, no default or event of default
which existed or was continuing on the date of the commencement of any
Subsidiary Guaranty Payment Blockage Period with respect to the Designated
Senior Indebtedness of such Subsidiary Guarantor initiating such Subsidiary
Guaranty Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Subsidiary Guaranty Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 12.04. Demand for Payment. If a demand for payment is
made on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall
promptly notify the holders of the Designated Senior Indebtedness of such
Subsidiary Guarantor (or their Representatives) of such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the applicable
Subsidiary Guarantor and pay it over to them or their Representatives as their
interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with such Subsidiary Guaranties) to the rights of
holders of such Senior Indebtedness to receive distributions applicable to
Senior Indebtedness of such Subsidiary Guarantor. A distribution made under this
Article 12 to holders of such Senior Indebtedness which otherwise would have
been made to Securityholders is not, as between the relevant Subsidiary
Guarantor and Securityholders, a payment by such Subsidiary Guarantor on such
Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall
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(1) impair, as between a Subsidiary Guarantor and
Securityholders, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay its Subsidiary Guaranty to the
extent set forth in Article 11; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by such Subsidiary Guarantor
under its Subsidiary Guaranty, subject to the rights of holders of
Senior Indebtedness of such Subsidiary Guarantor to receive
distributions otherwise payable to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness of any Subsidiary Guarantor to
enforce the subordination of the Subsidiary Guaranty of such Subsidiary
Guarantor shall be impaired by any act or failure to act by such Subsidiary
Guarantor or by its failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent shall continue to
make payments on any Subsidiary Guaranty and shall not be charged with knowledge
of the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives written notice satisfactory to it that
such payments are prohibited by this Article 12. The Company, the relevant
Subsidiary Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to give the notice; provided, however, that, if an issue of
Senior Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of any Subsidiary Guarantor with the same
rights it would have if it were not the Trustee. The Registrar and co-registrar
and the Paying Agent may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to any
Senior Indebtedness of any Subsidiary Guarantor which may at any time be held by
it, to the same extent as any other holder of such Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 12 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative.
Whenever any Person is to make a distribution or give a notice to
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holders of Senior Indebtedness of any Subsidiary Guarantor, such Person shall be
entitled to make such distribution or give such notice to their Representative
(if any).
SECTION 12.11. Article 12 Not To Prevent Events of Default or
Limit Right To Demand Payment. The failure to make a payment pursuant to a
Subsidiary Guaranty by reason of any provision in this Article 12 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article 12
shall have any effect on the right of the Securityholders or the Trustee to make
a demand for payment on any Subsidiary Guarantor pursuant to its Subsidiary
Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article 12, the Trustee shall be entitled to request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of such Subsidiary Guarantor held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article 12,
and, if such evidence is not furnished, the Trustee shall be entitled to defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between
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the Securityholders and the holders of Senior Indebtedness of any Subsidiary
Guarantor as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness of
Subsidiary Guarantors on Subordination Provisions. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of any Subsidiary Guarantor, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail addressed as
follows:
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if to the Company or any Subsidiary Guarantor:
Associated Materials Incorporated
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, NY 10172
Attention: Ira D. Kleinman
with copies to:
White & Case
1155 Avenue of the Americas
New York, NY 10010
Attention: Jonathan Kahn, Esq.
if to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
The Company, any Subsidiary Guarantor or the Trustee by notice
to the other may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor, the
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Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, such action is authorized or permitted by this Indenture and
that all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
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whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to be
open in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 13.09. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
SECTION 13.10. No Recourse Against Others. No past, present or
future director, officer, employee, member, incorporator or stockholder, as
such, of the Company or any Subsidiary Guarantor shall not have any liability
for any obligations of the Company under the Securities or this Indenture or of
such Subsidiary Guarantor under its Subsidiary Guaranty or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issuance of the Securities. Such waiver and release may not be effective
to waive liabilities under the U.S. Federal securities laws, and it is the view
of the SEC that such a waiver is against public policy.
SECTION 13.11. Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
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SECTION 13.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
SECTION 13.14. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
Indenture, loan or debt agreement may not be used to interpret this Indenture.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
ASSOCIATED MATERIALS INCORPORATED
By: /s/ D. Keith LaVanway
------------------------------------
Name: D. Keith LaVanway
Title: Vice President and Chief
Financial Officer
AMI MANAGEMENT COMPANY, as
Subsidiary Guarantor
By: /s/ D. Keith LaVanway
------------------------------------
Name: D. Keith LaVanway
Title: Vice President, Chief
Financial Officer,
Secretary and Treasurer
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ James D. Nesci
------------------------------------
Name: James D. Nesci
Title: Authorized Signer
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall
have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or
any successor securities clearing agency.
"Definitive Security" means a certificated Initial Security,
Exchange Security or Private Exchange Security bearing, if required, the
restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Distribution Compliance Period", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the Issue Date with respect to such
Securities.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System or any successor securities clearing agency.
"Exchange Securities" means (1) the 9 3/4% Senior Subordinated
Securities Due 2012 issued pursuant to this Indenture in connection with a
Registered Exchange Offer pursuant to a Registration Rights Agreement and (2)
Additional Securities, if any, issued
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pursuant to a registration statement filed with the SEC under the Securities
Act.
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, Credit Suisse First Boston Corporation, UBS
Warburg LLC and CIBC World Markets Corp., and (2) with respect to each issuance
of Additional Securities, the Persons purchasing such Additional Securities
under the related Purchase Agreement.
"Initial Securities" means (1) $165 million aggregate
principal amount of 9 3/4% Senior Subordinated Securities Due 2012 issued on the
Issue Date and (2) Additional Securities, if any, issued in a transaction exempt
from the registration requirements of the Securities Act.
"Institutional Accredited Investor" means an institutional
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Private Exchange" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 9 3/4% Senior
Subordinated Securities Due 2012 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated April 18,
2002, between Simon Acquisition Corp. and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities, the purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
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"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated as of the Issue Date, among the Company, the Subsidiary Guarantor and the
Initial Purchasers, and (2) with respect to each issuance of Additional
Securities issued in a transaction exempt from the registration requirements of
the Securities Act, the registration rights agreement, if any, among the
Company, the Subsidiary Guarantor, if any, and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(e) hereto.
1.2 Other Definitions
Defined
Term in Section
---- ----------
"Agent Members" 2.1(b)
"Global Security" 2.1(a)
"Permanent Regulation S Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
"Temporary Regulation S Global Security" 2.1(a)
2. The Securities.
2.1 (a) Form and Dating. The Initial Securities will be offered and
sold by the Company pursuant to a Purchase Agreement. The
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Initial Securities will be resold initially only to (i) QIBs in reliance on Rule
144A under the Securities Act ("Rule 144A") and (ii) Persons other than U.S.
Persons (as defined in Regulation S) in reliance on Regulation S under the
Securities Act ("Regulation S"). Initial Securities may thereafter be
transferred to, among others, QIBs, Institutional Accredited Investors and
purchasers in reliance on Regulation S, subject to the restrictions on transfer
set forth herein. Initial Securities initially resold pursuant to Rule 144A
shall be issued initially in the form of one or more permanent global Securities
in definitive, fully registered form (collectively, the "Rule 144A Global
Security") and Initial Securities initially resold pursuant to Regulation S
shall be issued initially in the form of one or more temporary global securities
in definitive, fully registered form (collectively, the "Temporary Regulation S
Global Security"), in each case without interest coupons and with the global
securities legend and restricted securities legend set forth in Exhibit 1
hereto, which shall be deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Securities Custodian, and registered in
the name of the Depository or a nominee of the Depository, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture.
Beneficial ownership interests in the Temporary Regulation S Global Security
will not be exchangeable for interests in the Rule 144A Global Security, a
permanent global security (the "Permanent Regulation S Global Security"), or any
other Security without a legend containing restrictions on transfer of such
Security prior to the expiration of the Distribution Compliance Period and then
only upon certification in form reasonably satisfactory to the Trustee that
beneficial ownership interests in such Temporary Regulation S Global Security
are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the
Securities Act. The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities". The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depository or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered
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by the Trustee to such Depository or pursuant to such Depository's instructions
or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under the Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities shall not be entitled to receive physical delivery of Definitive
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver (1) on
the Issue Date, an aggregate principal amount of $165 million 9 3/4% Senior
Subordinated Securities Due 2012, (2) any Additional Securities for an original
issue in an aggregate principal amount specified in the written order of the
Company pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or
Private Exchange Securities for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to a Registration Rights Agreement, for
a like principal amount of Initial Securities, in each case upon a written order
of the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.03 of the Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar or a
co-registrar with a request
(x) to register the transfer of such Definitive Securities; or
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(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or its attorney duly authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Definitive Securities are being
transferred (x) pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144 under the
Securities Act; or (y) in reliance upon another exemption from
the requirements of the Securities Act, (i) a certification to
that effect (in the form set forth on the reverse of the
Security) and (ii) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompa-
-7-
nied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with
(i) certification, in the form set forth on the
reverse of the Security, that such Definitive Security is
either (A) being transferred to a QIB in accordance with Rule
144A or (B) is being transferred after expiration of the
Distribution Compliance Period by a Person who initially
purchased such Security in reliance on Regulation S to a buyer
who elects to hold its interest in such Security in the form
of a beneficial interest in the Permanent Regulation S Global
Security; and
(ii) written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an
adjustment on its books and records with respect to such Rule
144A Global Security (in the case of a transfer pursuant to
clause (b)(i)(A)) or Permanent Regulation S Security (in the
case of a transfer pursuant to clause (b)(i)(B)) to reflect an
increase in the aggregate principal amount of the Securities
represented by the Rule 144A Global Security or Permanent
Regulation S Global Security, as applicable, such instructions
to contain information regarding the Depository account to be
credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, equal to the
principal amount of the Definitive Security so canceled. If no Rule 144A Global
Securities or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate, a new Rule
144A Global Security or Permanent Regulation S Global Security, as applicable,
in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Deposi-
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tory, in accordance with the Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
therefor. A transferor of a beneficial interest in a Global Security shall
deliver to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the participant account
of the Depository to be credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions, instruct
the Depository to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial interest in the Global
Security being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such interest
is being transferred in an amount equal to the principal amount of the interest
to be so transferred, and the Registrar shall reflect on its books and records
the date and a corresponding decrease in the principal amount of the Global
Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security may not
be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be adopted by the
Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Securities. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred through Euroclear
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or Clearstream in accordance with the Applicable Procedures and only (i) to the
Company, (ii) so long as such Security is eligible for resale pursuant to Rule
144A, to a Person whom the selling holder reasonably believes is a QIB that
purchases for its own account or for the account of a QIB to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, (iii) in an offshore transaction in accordance with Regulation S, (iv)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act or (v) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Restricted Global
Securities (and all Securities issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITIES, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV)
PURSUANT TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY
-10-
RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar shall
permit the transferee thereof to exchange such Transfer Restricted Security for
a certificated Security that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted Security, if
the transferor thereof certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such certification to be in the form
set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the effectiveness of a
Shelf Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to legends
on such Initial Security or such Private Exchange Security will cease to apply,
the requirements requiring any such Initial Security or such Private Exchange
Security issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an Initial
Security or Private Exchange Security in global form, in each case without
restrictive transfer legends, will be available to the transferee of the Holder
of such Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange Security
or directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Exchange
Securities in certificated or global form will be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer.
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(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will still apply with respect to Holders of such Initial Securities that do
not exchange their Initial Securities, and Private Exchange Securities in global
form with the global securities legend and the Restricted Securities Legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(f) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive Securities
and Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections 3.06,
3.07, 4.06, 4.09 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article 3 of the Indenture, except
the unredeemed portion of any Definitive Security being redeemed in part, or (b)
any Security for a period beginning 15 Business Days before the mailing of a
notice of an of-
-12-
fer to repurchase or redeem Securities or 15 Business Days before an interest
payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of the Indenture shall evidence the same debt and shall be
entitled to the same benefits under the Indenture as the Securities surrendered
upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the records of the
Depository or its nominee or of any participant or member thereof, with respect
to any ownership interest in the Securities or with respect to the delivery to
any participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
under the Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depository or its nominee in the case of
a Global Security). The rights of beneficial owners in any Global Security shall
be exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under the Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as
-13-
are expressly required by, and to do so if and when expressly required by, the
terms of the Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Certificated Securities. (a) A Global Security deposited with the
Depository or with the Trustee as Securities Custodian for the Depository
pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in
the form of Definitive Securities in an aggregate principal amount equal to the
principal amount of such Global Security, in exchange for such Global Security,
only if such transfer complies with Section 2.3 hereof and (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act and, in either case, a
successor Depository is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing or (iii) the
Company, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of Definitive Securities under the Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 principal
amount and any integral multiple thereof and registered in such names as the
Depository shall direct. Any Definitive Security delivered in exchange for an
interest in the Transfer Restricted Security shall, except as otherwise provided
by Section 2.3(e) hereof, bear the restricted securities legend set forth in
Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under the Indenture or the Securities.
(d) In the event of the occurrence of one of the events
specified in Section 2.4(a) hereof, the Company shall promptly make
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available to the Trustee a reasonable supply of Definitive Securities in
definitive, fully registered form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITIES LEGEND]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO
-2-
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITIES, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A GLOBAL
SECURITY OR THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE SECURITIES, (IV) OUTSIDE THE UNITED STATES IN A TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL
NOTIFY ANY
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PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN
APPLICABLE.
-4-
No. ________ CUSIP No. ________
$ ___________
9 3/4% Senior Subordinated Note Due 2012
Simon Acquisition Corp., a Delaware corporation, promises to
pay to Cede & Co., or registered assigns, the principal sum of _______________
_____________________________ ________________________________ Dollars on April
15, 2012.
Interest Payment Dates: April 15 and October 15, commencing
October 15, 2002.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the
other side of this Security.
ASSOCIATED MATERIALS INCORPORATED
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Dated:
-5-
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by
- ---------------------------
Authorized Signatory
-6-
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 3/4% Senior Subordinated Note Due 2012
1. Interest
Simon Acquisition Corp., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
subsequent 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.0% per annum) from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually in arrears on April 15 and October 15 of
each year, commencing October 15, 2002. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from April 23, 2002. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium, if any, and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium, if
any, and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on a certificated Security will be
made by wire transfer to a U.S. dollar account maintained by the payee with a
bank in the United States if such Holder elects payment by wire transfer by
giving written notice to
-7-
the Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust Company, a Delaware banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or coregistrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of April 23, 2002 ("Indenture"), among the Company, the Subsidiary Guarantor and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the
Indenture (the "TIA"). Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. This Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
-8-
5. Optional Redemption; Redemption Upon a Change of Control
(a) Except as set forth below, the Company shall not be
entitled to redeem the Securities at its option prior to April 15, 2007.
On and after April 15, 2007, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on April 15 of the
years set forth below:
Redemption
Period Price
------ -----
2007................................................... 104.875%
2008................................................... 103.250%
2009................................................... 101.625%
2010 and thereafter.................................... 100.000%
Prior to April 15, 2005, the Company shall be entitled at its
option on one or more occasions to redeem Securities (which includes Additional
Securities, if any) in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes Additional
Securities, if any) at a redemption price (expressed as a percentage of
principal amount) of 109.75%, plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings (provided
that if the Equity Offering is an offering by Parent, a portion of the net cash
proceeds thereof equal to the amount required to redeem any such Securities is
contributed to the equity capital of the Company); provided, however, that:
(1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains
outstanding immediately after the occurrence of each such redemption
(other than Securities held, directly or indirectly, by the Company or
its Affiliates) and
(2) each such redemption occurs within 90 days after the
date of the related Equity Offering.
-9-
(b) At any time on or prior to April 15, 2007, the
Securities may also be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, notice of which is sent no
later than 30 days after the occurrence of such Change of Control by notice
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued but unpaid interest, if any, to, the date of redemption (the
"Change of Control Redemption Date").
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of:
(1) 1.0% of the principal amount of such Security; or
(2) the excess of
(a) the present value at such time of:
(x) the redemption price of such Security at
April 15, 2007 (such redemption price being described
under paragraph 5(a) above, plus
(y) all required interest payments (excluding
accrued but unpaid interest) due on such Security
through April 15, 2007
computed using a discount rate equal to the Treasury Rate plus
50 basis points, over
(b) the principal amount of such Security.
"Treasury Rate" means the yield to maturity at the Change of
Control Redemption Date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least two
Business Days prior to the Change of Control Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source or
similar market data)) most nearly equal to the period from the Change of Control
Redemption Date to April 15, 2007; provided, however, that if the period from
the Change of Control Redemption Date to April 15, 2007 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given,
-10-
except that if the period from the Change of Control Redemption Date to
April 15, 2007 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under Section 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price equal to 101% of the
principal amount of the Securities to be purchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the related
interest payment date) as provided in, and subject to the terms of, the
Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
-11-
9. Guaranty
The payment by the Company of the principal of, and premium
and interest on, the Securities is unconditionally guaranteed on a joint and
several senior subordinated basis by each Subsidiary Guarantor.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
-12-
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate principal amount outstanding of the
Securities (including consents obtained in connection with a tender offer for,
exchange for or purchase of the Securities) and (ii) any past default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company, the Subsidiary Guarantor and the
Trustee shall be entitled to amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guaranties, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantor, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required purchase, upon declaration of acceleration or
otherwise; (iii) the failure by the Company or any Subsidiary Guarantor to
comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $10 million; (v) certain events of bankruptcy
or insolvency with respect to the Company or any Significant Subsidiary; (vi)
certain judgments or decrees for the payment of money in excess of $10 million;
and (vii) certain defaults with respect to Subsidiary Guaranties. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities may declare all the Securities to
be due and payable. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
-13-
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is not opposed to the
interest of the Holders.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
No past, present or future director, officer, employee,
member, incorporator or stockholder, as such, of the Company or the Trustee
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
-14-
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
21. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
22. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Associated Materials Incorporated
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, NY 10172
Attention: Ira D. Kleinman
-15-
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another
to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
------------------- ----------------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms.
CHECK ONE BOX BELOW
(1) _ in the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities
Act of 1933) that purchases for its own account or
for the account of a qualified institutional buyer to
whom notice is given that such transfer is being made
in reliance on Rule 144A, in each case pursuant to
and in compliance with Rule 144A under the Securities
Act of 1933; or
(2) _ inside the United States to an Institutional
Accredited Investor (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933)
that,
-16-
prior to such transfer, furnished to the Trustee a
signed letter containing certain representations and
agreements relating to the restrictions on transfer
of the Securities; or
(3) _ outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act of 1933; or
(4) _ pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933; or
(5) _ pursuant to an effective registration statement under
the Securities Act of 1933; or
(6) _ to the Company.
If such transfer is being made pursuant to an offshore transaction in accordance
with Rule 904 under the Securities Act, the undersigned further certifies that
(i) the offer of the Securities was not made to a person
in the United States;
(ii) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States, or (b) the transaction was executed in, on
or through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;
(iii) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903 or Rule
904 of Regulation S, as applicable;
(iv) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act;
(v) we have advised the transferee of the transfer
restrictions applicable to the Securities; and
(vi) if the circumstances set forth in Rule 904(B) under
the Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending
-17-
a confirmation or other notice stating that the Securities may be
offered and sold during the distribution compliance period specified in
Rule 903 of Regulation S; pursuant to registration of the Securities
under the Securities Act; or pursuant to an available exemption from
the registration requirements under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
(2) or (3) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act.
-----------------------------------
Signature
Signature Guarantee:
- ----------------------------- ----------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
- --------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the
-18-
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:
----------------------------- ---------------------------------
NOTICE: To be executed by an
executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
-19-
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Amount of Amount of Principal amount Signature of
decrease in increase in of this Global authorized
Principal Principal Security signatory of
amount of amount of following such Trustee or
Date of this Global this Global decrease or Securities
Exchange Security Security increase Custodian
-------- -------- -------- -------- ---------
-20-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount in principal amount: $
Date: Your Signature:
---------------------- --------------------------
(Sign exactly as your
name appears on the
other side of this
Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY * **]
- ----------
* If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
** If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix
A and replace the Assignment Form included in this Exhibit A with the
Assignment Form included in such Exhibit 1.
-2-
No. CUSIP No.
------------- --------------
$
9 3/4% Senior Subordinated Note Due 2012
Simon Acquisition Corp., a Delaware corporation, promises to
pay to __________, or registered assigns, the principal sum of
____________________ Dollars on April 15, 2012.
Interest Payment Dates: April 15 and October 15 commencing
October 15, 2002.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
ASSOCIATED MATERIALS INCORPORATED
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
-------------------------
Authorized Signatory
-3-
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
9 3/4% Senior Subordinated Note Due 2012
1. Interest
Associated Materials Incorporated, a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this
Security at a rate of 0.25% per annum (increasing by an additional 0.25% per
annum after each subsequent 90-day period that occurs after the date on which
such Registration Default occurs up to a maximum additional interest rate of
1.0% per annum) from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults
have been cured.2 The Company will pay interest semiannually in arrears on April
15 and October 15 of each year, commencing October 15, 2002. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from April 23, 2002. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the February 1 or August 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of
- ----------
* Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has
occurred with respect to the related Initial Securities during the
interest period in which such date of issuance occurs.
-4-
the Securities represented by a Global Security (including principal, premium,
if any, and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company. The Company
will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust Company, a New York banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of April 23, 2002 (the "Indenture"), among the Company, the Subsidiary Guarantor
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on
the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase capital stock; make investments;
issue or sell capital stock of subsidiaries;
-5-
engage in transactions with affiliates; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; and
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries. These covenants are subject to important exceptions
and qualifications.
5. Optional Redemption; Redemption Upon a Change of Control
(a) Except as set forth below, the Company shall not be
entitled to redeem the Securities at its option prior to April 15, 2007.
On and after April 15, 2007, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date) plus accrued interest to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:
Redemption
Period Price
------ --------
2007............................................................ 104.875%
2008............................................................ 103.250%
2009............................................................ 101.625%
2010 and thereafter............................................. 100.000%
Prior to April 15, 2005, the Company shall be entitled at its
option on one or more occasions to redeem Securities (which includes Additional
Securities, if any) in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes Additional
Securities, if any) at a redemption price (expressed as a percentage of
principal amount) of 109.75%, plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings (provided
that if the Equity Offering is an offering by Parent, a portion of the Net Cash
Proceeds thereof equal to the amount required to redeem any such Securities is
contributed to the equity capital of the Company); provided, however, that:
(1) at least 65% of such aggregate principal amount at
maturity of Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of
-6-
each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and
(2) each such redemption occurs within 90 days after the
date of the related Equity Offering.
(b) At any time on or prior to April 15, 2007, the
Securities may also be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, notice of which is sent no
later than 30 days after the occurrence of such Change of Control by notice
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued but unpaid interest, if any, to, the date of redemption (the
"Change of Control Redemption Date").
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of:
(1) 1.0% of the principal amount of such Security; or
(2) the excess of
(a) the present value at such time of:
(x) the redemption price of such Security at
April 15, 2007 (such redemption price being described
under paragraph 5(a) above, plus
(y) all required interest payments (excluding
accrued but unpaid interest) due on such Security
through April 15, 2007
computed using a discount rate equal to the Treasury Rate plus
50 basis points, over
(b) the principal amount of such Security.
"Treasury Rate" means the yield to maturity at the Change of Control
Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two Business
Days prior to the Change of Control Redemption Date (or, if such Statistical
Release is no longer published, any publicly available source or similar market
data)) most nearly equal to the period from the Change of Control Redemption
Date to April 15, 2007; provided, however, that if the
-7-
period from the Change of Control Redemption Date to April 15, 2007 is not equal
to the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Change of Control Redemption Date to
April 15, 2007 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, unless the Company has exercised its right
to redeem the Securities as described under Section 5 hereof, any Holder of
Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price equal to 101% of the
principal amount of the Securities to be purchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the related
interest payment date) as provided in, and subject to the terms of, the
Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before
-8-
the Securities may be paid. The Company agrees, and each Securityholder by
accepting a Security agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
9. Guaranty
The payment by the Company of the principal of, and premium
and interest on, the Securities is unconditionally guaranteed on a joint and
several senior subordinated basis by each Subsidiary Guarantor.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the
-9-
Trustee money or U.S. Government Obligations for the payment of principal and
interest on the Securities to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
(including consents obtained in connection with a tender offer for, exchange for
or purchase of the Securities) and (ii) any past default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in principal amount outstanding of the Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantor and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities,
including Subsidiary Guaranties, or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
the Subsidiary Guarantor, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder.
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required purchase, upon declaration of acceleration or
otherwise; (iii) failure by the Company or any Subsidiary Guarantor to comply
with other agreements in the Indenture or the Securities, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $10 million; (v) certain events of bankruptcy
or insolvency with respect to the Company or any Significant Subsidiary; (vi)
certain judgments or decrees for the payment of money in excess of $10 million;
and (vii) certain defaults with respect to Subsidiary Guaranties. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities
-10-
may declare all the Securities to be due and payable. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is not opposed to the interest of the
Holders.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
No past, present or future director, officer, employee, member,
incorporator or stockholder, as such, of the Company or the Trustee shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common),
-11-
TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.3
22. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
- ----------
* Delete if this Security is not being issued in exchange for an Initial
Security.
-12-
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Associated Materials Incorporated
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, New York 10172
Attention: Ira D. Kleinman
-13-
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security
on the books of the Company. The agent may substitute another
to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
------------------------ ----------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
-14-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount in principal amount: $
Date: Your Signature:
---------------------- --------------------------
(Sign exactly as your
name appears on the
other side of this
Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.